Good morning and welcome to Andean Precious Metals third quarter 2024 results conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Amanda Mallough, Director of Investor Relations. Please go ahead.
Thank you, Operator, and good morning, everyone. Before we get started, I would like to point out that during today's call, we may make forward-looking statements as defined under Canadian securities law. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our press release, MD&A, and financial statements are available on both SEDAR+ and our corporate website, AndeanPM.com. With us on today's webcast is Alberto Morales, Andean's Executive Chairman and CEO; Juan Carlos Sandoval, our Chief Financial Officer; Dominic Kizek, our new Vice President of Finance and Corporate Controller; and Alex Pascual, our Director of Financial Planning and Analysis. Following management's formal remarks, we will open the call to questions. And now over to you, Alberto.
Thank you, Amanda, and welcome everyone. We are pleased to report a solid quarter with strong financial performance. For Q3 2024, we generated record consolidated revenue of $68.4 million, supported by an average realized gold price of $2,413 per ounce and silver at $31.40 per ounce. This revenue helped us close the quarter with a stronger financial position, including a record $98.1 million in cash, cash equivalents, marketable securities, and short-term investments. Our ability to generate $17 million in free cash flow this quarter, despite additional CapEx expenditure, was bolstered by $23.4 million in operating cash flow. Gross profit came at $21.4 million, driven primarily by lower underlying cost of production. On the production side, we delivered consolidated Q3 output of 29,284 gold equivalent ounces, which is equivalent to 2.3 million silver ounces.
Golden Queen produced 14,025 gold equivalent ounces, while San Bartolomé contributed with 1.2 million silver equivalent ounces, supported by improved recovery. We'll discuss production in greater detail later in the call. But now, I'd like to reaffirm our 2024 production guidelines, which we expect to achieve at the lower end. We also anticipate a reduction in operating cash cost and all-in sustaining costs per gold ounce sold in Q4, thanks to increased production levers and lower CapEx. I'd also like to welcome Dominic Kizek to our management team as Vice President of Finance and Corporate Controller. Dominic is here with us on the call today and brings a wealth of experience from his time at New Gold, Victoria Gold, and Agnico Eagle.
Lastly, on health and safety, we recorded one lost time injury at San Bartolomé in Q3, while Golden Queen achieved 403 consecutive days without a lost time injury, reflecting our ongoing commitment to workplace safety. We look forward to sharing further details on these results and answering your questions. With that, I will hand this over to Juan Carlos, who will walk through our financials in greater detail.
Thank you, Alberto. Good morning, everyone. As we turn to our financial performance this quarter, I'd like to emphasize the strength of our financial position and our continued focus on value generation. Starting with production and revenue, we achieved consolidated Q3 production of 2.3 million silver equivalent ounces, up 1.1 million ounces from Q3 2023. The growth was largely driven by the inclusion of Golden Queen, which contributed 1.1 million silver equivalent ounces this quarter. We closed Q3 with revenue of $68.4 million, a 79% increase over Q3 2023, and for the first nine months ended September 30th, consolidated revenue reached $181.2 million, a 137% increase year over year. This impressive growth is a result of Golden Queen's contribution and higher silver prices at San Bartolomé.
As Alberto already mentioned, the company ended Q3 with a robust balance sheet, holding $98.1 million in cash, cash equivalents, marketable securities, and short-term investments. This balance sheet position enables us to fund our key initiatives while maintaining financial flexibility. On the cost side, total cost of sales rose to $41.6 million for the quarter, reflecting the additional production expenses associated with Golden Queen. However, at San Bartolomé, we saw lower Bolivian-Boliviano-denominated operating expenses, helping us to partially offset the increase. Depreciation and depletion also rose to $5.3 million this quarter, driven by the inclusion of Golden Queen's assets. General and administrative expenses were $6.3 million in Q3, with a portion of this increase also due to Golden Queen's acquisition and associated corporate costs. EBITDA was $20.1 million and $48.1 million for the three months and nine months ended, respectively.
Adjusted EBITDA was $19.2 million for the quarter, reflecting strong revenue growth from both Golden Queen and San Bartolomé. For the nine months ended September 30th, adjusted EBITDA reached $43.9 million, showing the positive impact of lower operating costs and higher realized prices for both EBITDA and adjusted EBITDA. Capital expenditures for this quarter totaled $15.9 million, supporting ongoing projects at Golden Queen and the FDF facility at San Bartolomé. On the topic of CapEx, we had increased our 2024 CapEx program and now anticipate total CapEx spend of $36 million. The increase is primarily driven by higher investments at our Golden Queen mine, which we will discuss in more detail in a couple of slides. In summary, Q3 was another strong quarter financially, marked by record revenues, robust cash flows, and a healthy cash balance. These results position us well to pursue growth opportunities while maintaining financial stability.
Moving on to slide eight, San Bartolomé's operating financial performance. In Q3, San Bartolomé purchased 220,000 tons of material, marking a 6% increase over the last year as we continue sourcing third-party oxide material to support our processing capacity. Total throughput was lower year over year at 0.3 million tons, primarily due to the planned cessation of our mining activities at Pallacos. However, we maintained robust processing levels by bringing in materials from Paca and other local sources, ensuring steady output. Silver equivalent production was 1.2 million ounces, down slightly from last year due to changes in throughput. Revenue for Q3 was $35.4 million, a 7% decrease compared to last year, largely driven by lower sale volumes despite the favorable impact of higher average silver prices. At San Bartolomé, recoveries were 83% at Q3 versus 76% for the same period in 2023.
We have had a steady increase in recoveries during 2024 due to the optimizing operation process. On the cost side, total cost of sales decreased significantly to $18.9 million, reflecting our improved cost controls and favorable foreign exchange. The cash gross operating margin per silver equivalent ounce sold saw a strong increase to $12.3, up from $2.5 last year, while gross margin ratio also improved to 46.6%. Both metrics benefiting from higher silver prices and lower operating costs. In terms of capital expenditures, Q3 spending was $1.4 million, down from last year, as we wrapped up work on our FDF project. This facility is expected to reach, before end of Q4 of this year, deeper, higher-grade sections, and we've been steadily increasing mill throughput position as well for upcoming quarters. In summary, San Bartolomé is delivering steady performance with strengthened margins and disciplined cost management.
We're optimistic about the continued benefits from our new operational focus and look forward to building on this foundation. Moving on to Golden Queen, I'll provide an update on this operation, which we acquired in late 2023. While we don't have comparable Q3 data from last year, I'll share performance highlights from Q3 relative to Q2 of this year. Golden Queen produced 14,025 gold equivalent ounces, down from 16,986 ounces in Q2. This decline was largely due to the temporary suspension of our crusher circuit due to maintenance, which extended beyond our planned schedule, as well as certain equipment upgrades. Unfortunately, we faced extended lead times for certain parts, which impacted our stacking and leaching schedules. To address these challenges, we've implemented a comprehensive CapEx and equipment overhaul program, aiming to improve reliability in late 2024 and beyond.
Revenue for the quarter was $33 million, compared to $40 million in Q2. The lower revenue aligns with reduced production, as we sold 13,714 gold equivalent ounces at an average realized price of $2,474 versus 17,348 ounces at $2,305 in the prior quarter. On costs, total cost of sales decreased to $22.8 million from $25.2 million in Q2, with the reduction primarily attributable to lower production and inventory adjustments. However, due to the decrease in ounces sold, operating cash cost per ounce rose to $1,557 from $1,350 in Q2. All-in sustaining cost and all-in cost per ounce were also higher this quarter at $2,300 and $2,928, respectively, reflecting the impact of production delays and our commitment to upgrade our fleet, which included adding six new haul trucks and refurbishing existing equipment, as well as additional exploration intended to increase the life of mine.
Looking ahead, we expect the ongoing CapEx investment to strengthen Golden Queen's production capacity and operational stability, driving down costs and enhancing reliability in the quarters to come. With respect to our guidance, as we review our updated guidance for 2024, I want to highlight that despite some operational challenges, we are reaffirming our full-year production guidance. We expect production to land at the low end of our previously announced ranges. Specifically, for Golden Queen, we're targeting 60,000 ounces gold equivalent, five plus minus 5%. For San Bartolomé, our target remains at five million silver equivalent ounces, plus minus 5%. On a consolidated basis, that brings us to an estimated 115,000 gold equivalent ounces or 10.4 million silver equivalent ounces for the year, plus minus 5%. Turning to our cost guidance, we've made a few adjustments.
At San Bartolomé, we've been able to sustain lower operating expenses, and as a result, we're now forecasting a cash gross operating margin of $7 per silver equivalent ounce, with a gross margin ratio of 30%. This revised figure reflects the cost efficiencies we have achieved throughout the year. For Golden Queen, we're adjusting our all-in sustaining cost guidance to $1,950 per ounce. This increase is largely due to the significant capital expenditures we've invested in equipment overhauls and replacements, and exploration aimed at ensuring greater operational reliability and longer life of mine moving forward. On the CapEx guidance, as mentioned earlier, we have increased our total 2024 target spend for both sustaining and growth CapEx to $36 million.
The primary increases are for new growth CapEx at Golden Queen, including new haul trucks and loaders, as well as additional exploration, which we anticipate to increase our overall throughput and future production and a longer life of mine. These updates reflect our disciplined approach in meeting production targets while also positioning our operations for long-term stability and growth. With these steps, we're setting the stage for improved cost management into 2025 and beyond. Now, I'll turn the call back to Alberto for final remarks. Alberto. Thank you, Juan Carlos. Looking back over the past year, it's remarkable to see how far we've come. In September 2023, we were a single asset, single company with a single product, with our production concentrated in a higher-risk jurisdiction and a limited life of mine of around two years.
We generated $76 million in revenue over the first nine months of 2023, and while we were profitable, we recognized that in order to truly thrive, we needed to grow and diversify our portfolio in a way that minimized risk and maximized value for the shareholders. Fast forward to today, and thanks to a transformative acquisition, we are now a multi-asset, multi-product company operating across two jurisdictions, including the United States. This has not only diversified our asset base but also expanded our production capacity significantly. In the first nine months of 2024, we generated $181 million in revenue and nearly tripled our EBITDA, reaching $28.1 million. We now have a stronger cash position, and even after our significant growth investment, our balance sheet remains strong. Most importantly, we've extended our production outlook to over six years, providing a much more stable foundation for the future.
Looking ahead to 2025, we're committed to continuing this momentum. Our objective is to once again double the size of our company while maintaining a strong cash balance. We'll do this by focusing on responsible growth, disciplined financial management, and operational excellence, always with a focus on delivering value to our shareholders. I am excited about the journey we're on, and we thank you for your continued support. We look forward to sharing more updates on our progress in the coming quarters. With that, I will hand back the call over to the operator for Q&A.
Thank you. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. Our first question is from Justin Chan with SCP Resource Finance. Please go ahead.
Alberto, Juan Carlos, Amanda, congratulations on a good quarter. It's good to speak to you guys again. My first one is just on CapEx. I saw that you had in the MD&A summary, you quoted a number of close to $16 million for CapEx. But just looking at the cash flow statement for the first three months, I think it was about $15.1 million total for the first three months. And from that, I calculated $6.5 million cash for CapEx just based on the cash flow statement. So that was quite a big difference between $16 million for Q3 and $6.5. I was just wondering if I'm missing something or if most of that $16 million was accrued or, yeah, just how to model that from, yeah, just the difference and where to put it in the model.
No, yeah, thank you, Justin. It's JC. I'm happy to run the numbers with you, but I think the difference is, for example, on the haul truck fleet, they were acquired through a vendor's financing. So I think that's where the difference comes. So I'm happy to walk through your calculations, but you have to take into account that some of that CapEx was done through the vendor's financing.
Understood. So I guess from a cash perspective, CapEx has changed. But yeah, just noting that cash CapEx has been $15 million up to now this year. Roughly, what are you expecting for the full year? How much of that CapEx in your guidance is cash versus non-cash?
Out of the total $36 million that we have announced, the haul truck fleet is being financed. The two loaders are being financed as well. So out of the $36 million, I would say $25 million will be in cash, Justin. Okay. So $25 million are cash, and the others are, I guess, accrued on the balance sheet as leases or something like that? That's correct, yes. It'll be reflected as a liability.
Yes. Okay. Thanks. That's very helpful. My second one's on San Bartolomé, and that was clearly a much-improved quarter there. I was wondering a couple of questions. One is on the margin increase. Was that purely down to, you mentioned efficiencies. I guess how much of that was efficiencies and how much of that was maybe timing of our purchases versus subsequent price movements because silver was up quite significantly over the period? And then, yeah, maybe answer that. And then I just had a question on guidance, given that guidance is for $7. I think year-to-date, you're at $8 margins now. So just wondering in Q4, does that—I guess that would imply quite a lower margin than it was in Q3.
Yes. Hi, Justin. This is Alberto. That is a good question. What we're trying to be on the guidance is we've seen volatility on the silver prices. We're just trying to be conservative, that we will always steer towards the biggest possible margins as we can get. But the volatility has been there. We have increased recoveries in San Bartolomé significantly. We're looking for Q4 to actually be in similar ranges as to one in Q3 with respect to recovery, which is a significant uplift from last year's and in the initial quarters of this year, so it is a combination of lower operating costs that we're trying to achieve locally as well, as well as increasing efficiencies and primarily focus on trying to enhance recoveries as much as possible.
Understood, Alberto, so if I look at that margin, I think year-to-date, your margin is now $8, and that was mostly because Q3 was $14.6 per ounce, so your guidance is $7, so if nothing changes, it sounds like you'll be well above that 7 number, but it's just sort of a conservative guidance for volatility. Is that right?
Yeah. It's just that we were trying to be conservative on volatility, especially what we've seen just in the last two weeks, if I may say.
Understood. Okay. Thanks. And then maybe one more, and I'll free up the line. Just on the FDF, what are your current thoughts on timing there for will we see meaningful amounts of tons come through in Q4, and how great are you expecting?
Yes. Let me just say about the FDF. As you know, when we started the project on the FDF, we were still mining the Pallaco, which is the lowest grade section of it. While continuing mining the Pallacos until about a year ago when we were in Q3 2023 that we announced the suspension of the operations as per our agreement with COMIBOL, we had accumulated a significant amount of lower-grade deposits of fines into the FDF.
What we're doing now is we are basically moving that upper layer. We began processing that, and we have now expanded this to go to deeper areas, and we're expecting that the FDF will be providing now reaching the higher-grade areas within the 50 grams range per ton that would basically be increasing our ounces arising from the FDF, which at current prices should bear a good margin as well.
Okay. Understood. Okay. Thanks very much, guys. I'll free up the line for other people. Thanks very much.
You're welcome, Justin.
Once again, if you have a question, please press star then one. We'll pause for a moment to see if any other callers join the queue. This concludes the question and answer session. I'd like to turn the conference back over to Alberto Morales for any closing remarks.
Thank you, Operator. Thank you all for joining us today and for your continued support. We remain committed to driving our business forward and look forward to sharing our progress in the quarters ahead. Thanks again, and have a great day.